Niklas Zennström, the Man Who Sold Skype — Twice

Niklas Zennström, 45, the tall and reserved Swede who was one of the founders of Skype, is likely to go to bed tonight sleeping on an undisclosed share of $1.19 billion. Not a bad day’s work.

In the European firmament of Internet stars, there are few, if any, that shine as brightly as Mr. Zennström (who is a founding member of The Wall Street Journal Europe’s Technology Leaders Council).

He has a track record of success, both as an entrepreneur — apart from Skype he also co-founded the Internet file-sharing service KaZaA — and now as an investor with his own venture capital firm, Atomico.

He is one of the few people from this side of the Atlantic that can command a crowd in America. Brent Hoberman, founder of Lastminute.com and now a venture capitalist at ProFounders who knows Mr. Zennström well, said: “I have been at conferences in America where people have boasted ‘I got to stand near to Niklas Zennström.’”

(However, not even Mr. Zennström has the Midas touch. His 2007 Internet TV play Joost flopped badly. The plug was eventually pulled in December 2008.)

Perhaps his smartest move came in the first sale of Skype, to the online auction site eBay for $2.6 billion. The clever part was that eBay failed to buy all of the IP, in particular the underlying peer-to-peer technology that as well as driving Skype had powered KaZaA. EBay only purchased a license to the technology.

Some have speculated that Mr. Zennström didn’t realize what he had done. “That is complete nonsense,” said Mr. Hoberman. “He knew exactly what he was selling. It was a very clever thing he did.”

When Skype floundered under eBay’s wing, Mr. Zennström was part of the team that bought the company back from eBay in November 2009 for $1.9 billion. Together with his Skype co-founder Janus Friis, he owned 14% of Skype. Today he sold the company for a second time.

Apart from his height, Mr. Zennström’s most defining characteristic is perhaps how quiet and understated he is, these are not attributes usually applied to entrepreneurs.

“He is a very thoughtful, very reflective entrepreneur. The difference between Niklas and the other guys is that he is not as public as them,” said a friend who wished to remain anonymous. “The thing that defines him is that he is private, does not court public attention. But once he is happy with you, he is a very open and engaging guy.

“But as a investor he is a very focussed. He is fascinated with massive ideas, ideas of a global scale.”

His VC firm Atomico has made a wide range of investments, from the French Jolicloud, a rival OS to Windows and iOS, to music service RDIO. He is also an investor in Angry Birds maker Rovio.

Mr. Zennström and his French wife, Catherine, established Zennström Philanthropies in 2007 to support and engage with organizations to stop climate change and to support human rights. He is also a keen yachtsman, taking part in the 2010 Sydney to Hobart race.

Comments (4 of 4)

I have also had the opportunity to spend some one on one face time with Mr. Dyne. Fast talker, but beyond brilliant. He is knowledgeable on most every subject and knows every law and it's plications how they relate to a transaction. Privelage to meet him and spend time with an individual this smart.

I met the "3rd guy" as well. He is actually a South African/American. He also gave me more to think about than all the lawyers combined I have been paying. No doubt about it. He is the smartest strategist I have met. Nothing happened unplanned and the result of the sale of Skype to Microsoft for $8.5 billion is the final proof! WOW!

3:42 pm May 11, 2011

storytrailer wrote:

Niklas and his partner are great guys. Understated and smart. They have another person that runs their strategic side of their business who is ultra smart, an Australian or American named Mark Dyne. Its almost like a 3 man team. I met with them separately as I am an entrepreneur, Dyne being the IP person so if it was an IP play it was probably him. He is tough and brilliant. He gave me more to think about in my meeting than anyone I have ever met. But anyone who says this group did this without knowing doesnt know the whole picture. Nothing happens they do not plan through.

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Tech Europe covers Europe’s technology leaders, their companies, and the people and industries that support them — and their ideas. The blog is edited by Ben Rooney, with contributions from The Wall Street Journal and Dow Jones Newswires.